Last Updated on October 31, 2023 by SPN Editor
Amidst escalating geopolitical tensions in the Middle East and growing concerns of a European economic recession, spot gold prices have made an impressive surge in the past month. Gold has witnessed a remarkable climb of over 10%, commencing from $1,815 in early October to its current valuation of approximately $2,000 per ounce, marking its highest point since May 2023. What’s even more intriguing is the possibility that this significant rally may not be over. According to senior Bloomberg commodity strategist Mike McGlone, the gold prices in 2024 could reach as high as $3,000.
McGlone elaborated on how the precious metal achieved the highest-ever average annual price of $1,930 per ounce from January 1 to October 27, 2023, despite a challenging macroeconomic environment characterized by a strong dollar, stock market resurgence, and high-interest rates.
This robust performance of gold in the face of such an adverse backdrop suggests a solid foundation for the metal.
In the Indian commodity market, there is a positive prediction for 24-carat gold prices in 2024. Gold has historically served as a portfolio diversifier, with its returns balancing the overall risk-reward equation for investors. According to an analysis by Angel One, 24-carat gold prices in 2024 are expected to reach Rs 68,000 per 10 grams by the next Akshay Tritiya, which is equivalent to $2,315.
“We expect gold prices (CMP: 60500/10gms) to move higher towards Rs.68000/10 gms till the next Akshay Tritiya, and investors are advised to accumulate on dips towards Rs.57000-58000/10 gms as an opportunity to accumulate the metal,” stated the report by Prathamesh Mallya, AVP- Research, Non-Agri Commodities, and Currencies at Angel One Ltd.
This revelation defies the conventional prediction of gold prices in 2024.
One of the factors driving gold prices in 2024 above the $2,100 level is the easing of monetary policy tightening by central banks. The US Federal Reserve’s cautious approach to interest rate hikes in the current year could open the door to interest rate cuts in 2024. Interest rate reductions could lead to a weaker US dollar in 2024, which would provide support for higher gold prices in 2024, given their negative correlation.
Similarly, the European Central Bank and the Bank of England are expected to proceed cautiously with interest rate hikes in 2024. Any slowdown in monetary tightening is likely to benefit non-yielding assets like gold, which could experience a substantial price boost. Tighter central bank policies and a decline in economic growth should make gold an appealing investment asset, further boosting its performance.
According to Georgette Boele, Senior FX & Precious Metals Strategist at ABN AMRO, monetary policy easing by the FED, ECB, and BoE will have a positive impact on gold prices in 2024. Gold prices are anticipated to rise as the interest rate differential between the USD, EUR, and GBP narrows.
Prediction of Gold Prices in 2024 by Commodities Experts
|Financial Institution||Prediction of Gold Prices in 2024 (per Ounce)|
|Mike McGlone (Bloomberg Research)||$3,000|
|ABN AMRO||$2,000 and above|
|Angel One Commodities||$2,315|
|ANZ Research||$2,200 by September 2024|
|The World Bank||$1,900 (end of 2023), $1,750 (end of 2024)|
ABN AMRO: Strategists at ABN AMRO expect gold prices in 2024 to average $2,000 and above.
ANZ Research: Meanwhile, strategists at ANZ Research anticipate gold prices accelerating to $2,200 by September 2024.
The World Bank: Analysts at The World Bank forecast gold prices to conclude 2023 at around $1,900 and drop to approximately $1,750 by the end of 2024. World Bank is pessimist about the increase of gold prices in 2024.
Future gold price predictions vary significantly as analysts and strategists take into account various factors likely to bring change. With most experts and analysts expecting prices to average above $2,200 per ounce, it appears that there is significant value to unlock from current levels.
Gold remains a prudent investment choice as it serves as an effective hedge against inflation. This is because it consistently retains its value and preserves purchasing power over the long term.
As inflation remains elevated, the value of gold prices in 2024 is likely to increase, with more hedge funds and institutional investors turning to this precious metal.